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USA POU and Bottled Coolers Report 2013
STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & GEOTHERMAL ENVIRONMENT & CARBON PACKAGING & DISTRIBUTION
Table of contents Bottled coolers and point of use Introduction
6
Methodology
7
Commentary Market overview – bottled coolers and point of use - US bottled coolers and POU in context – West Europe - Industry developments
8 10 12
Market structure – bottled coolers - Throughput - Cancellations - Contract lengths - Outlets - Machine types - Water types - Legislation - Maintenance and additional services
16 18 18 18 19 20 20 21 21
Market structure – point of use - Conversion - Outlets - Machine types - Rented/ sold - Maintenance and additional services
23 23 26 27 27 28
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Table of contents Bottled coolers and point of use Commentary Price structure and revenue indicators – bottled coolers and point of use Bottled coolers – companies Bottled coolers – brands Point of use – distributors Bottled coolers and POU forecasts
30 32 33 34 35
Charts Units in December - units/ million litres, % growth 2008-13e
8
Bottled water cooler units, 2008-13e Bottled water cooler volume, million litres, 2008-13e Bottled water cooler throughput, 2012-13e Bottled water cooler canellations, 2012-13e Bottled water cooler outlets, 2013e Bottled water cooler machine types, 2013e Bottled water cooler water types, 2013e
16 16 18 19 19 20 20
Point of use units, 2008-13e Point of use units added, 2012-13e Point of use outlets, 2013e Point of use machine types, 2013e Point of use rented/sold, 2013e
23 23 26 27 27
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Table of contents Bottled coolers and point of use Charts Bottled water coolers price structure, 2012-13e Point of use price structure, 2012-13e Bottled water coolers companies, machines, 2008-13e Bottled water coolers companies, volume, 2008-13e Bottled water coolers brands, volume, 2008-13e Point of use distributors, machines, 2008-13e Bottled coolers and POU forecasts, 2013e-18f Bottled coolers and POU split forecasts, 2013e-18f
30 30 32 32 33 34 35 37
Appendix Definitions Symbols US State abbreviations
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39 39 40
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Table of contents Bottled coolers and point of use Company profiles Key company profiles Culligan DS Waters of America NestlĂŠ Waters North America Quench Vertex Waterlogic
42 43 44 46 47 48
Other company profiles
49
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Introduction Bottled coolers and point of use Since 2010, the point of use (POU) concept has increasingly stolen territory from bottled water coolers. This has been mainly on the back of its ‘green’ credentials and increased convenience. In addition, the POU segment benefitted from the popularity and ubiquitous nature of coolers, paving the way for the transition from bottled coolers to POU. Nevertheless, the overall cooler market is highly competitive and presents a challenging environment in which to operate. On the bottled cooler side, the market is extremely consolidated with 3 major companies having significant national presence. On the POU side, the market remains highly fragmented with most companies having only regional presence. Note: For the purpose of this report, the term 'POU' represents a free-standing unit which is not integrated into any other furniture or mounting. The unit may be either floor-standing or counter-top. Zenith excludes from this definition units which may include POU purification technology but are installed within a cupboard, termed under-the-counter or under sink units and generally feature a pipe connection from the unit to a separate tap which is generally located over a sink, alongside the standard mains water tap. To the contrary, many players within the US market will consider the whole gamut of units equipped with a filtration or reverse osmosis purifying device, whether freestanding or not, to be ‘point of use’. In its contacts with US distributors, Zenith has attempted to ensure that only free-standing POU units have been included in the market total estimates.
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Methodology Bottled coolers and point of use In undertaking its research, Zenith depends upon the goodwill and co-operation of firms in the marketplace to provide accurate figures on their activities. Every effort has been made to include as broad a range of players active in the industry as possible. However, as water delivery or POU are not a central or actively marketed product for certain players and thus finalised figures may not be available, Zenith has, in certain instances, had to produce a ‘best estimate’ from industry sources. Since comparisons tend to be based on the size of cooler portfolios, overstatement of installation numbers is a risk inherent in a detailed analysis of the industry. Ultimately Zenith has had to make its own judgement and therefore all unit numbers should realistically be regarded as Zenith estimates. Zenith has included a market adjustment for over/underestimation; this also serves to act as a reconciliation of indirect sales within the marketplace in order to prevent double counting given that this report includes the portfolios of manufacturers and suppliers who then sell their units to distributors. In its contacts with companies offering water purification, water delivery and POU services within the US market, in addition to suppliers to the industry and other organisations linked to water purification, Zenith is confident that it has identified and contacted the leading cooler players operating across the country. However, the US market is characterised by a high level of fragmentation and it is believed that there are many hundreds of small players operating across the country. For the most part, however, these players - for whom coolers is not a core activity - service portfolios of just a handful of units, of as few as 50 or 100 in total. Zenith has adjusted its market totals for the collection of small operators with the inclusion of an ‘Others’ category. The cooler unit totals presented in this report represent the cumulative number of units in place at the end of each given year, taking into account any drop-off of old units. The reason that cumulative totals are applied is that each active unit generates revenue: either through rental or servicing. Generally, any growth expressed, either historic or forecast, applies to the growth of the cumulative total. Zenith would like to express its sincere gratitude for all help and assistance received from the cooler industry during this report’s research process.
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Market overview Bottled coolers and point of use Units in December
2008
2009
2010
2011
2012
2013e
Bottled water coolers Units % growth Units per '000 people Million litres % growth Point of Use Units % growth Units per '000 people Total coolers Units POU % share 2012
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Market overview Bottled coolers and point of use ď ˇ Commentary
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Market overview Bottled coolers and point of use US bottled coolers and POU in context – West Europe Million litres
2010
2011
2012
Bottled water coolers Units % change Units per thousand people % share of total cooler market Point of use water coolers Units % change Units per thousand people % share of total cooler market Total coolers Units % change Units per thousand people
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Market overview Bottled coolers and point of use US bottled coolers and POU in context – West Europe Commentary
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Market overview Bottled coolers and point of use Industry developments ď ˇ Commentary
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Market overview Bottled coolers and point of use Industry consolidation Commentary
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Market overview Bottled coolers and point of use Industry consolidation Buyer
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Target
Type
Year
Company X
Company X
BWC
2013
Company X
Company X
BWC
2013
Company X
Company X
BWC
2013
Company X
Company X
POU
2013
Company X
Company X
POU
2013
Company X
Company X
POU
2013
Company X
Company X
Coffee
2012
Company X
Company X
Coffee
2012
Company X
Company X
Coffee
2012
Company X
Company X
BWC
2012
Company X
Company X
BWC
2012
Company X
Company X
POU
2012
Company X
Company X
POU
2012
Company X
Company X
POU
2012
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Bottled water cooler market
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Market structure Bottled coolers Bottled water cooler volume 2008-13e
Bottled water cooler units 2008-13e 6,000 5,000
'000 units
Million litres 1,200
4,800
4,800
4,800
4,800
4,800
4,800
1,000
1,000
1,000
1,000
1,000
1,000
2008
2009
2010
2011
2012
2013e
1,000
4,000
800
3,000
600 2,000
400 1,000
200 0 2008
2009
2010
2011
2012
2013e
0
ď ˇ Commentary
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Market structure Bottled coolers ď ˇ Commentary
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Market structure Bottled coolers Throughput
2012
2013e
Litres per cooler
Cancellations
18.9l bottles per cooler per month
Quit rate %
2012
2013e
Throughput Commentary Cancellations Commentary Contract lengths
Commentary
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Market structure Bottled coolers Outlets, 2013e
Commercial 50%
50%
Domestic
Outlets
ď ˇ Commentary
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Market structure Bottled coolers Machine types, 2013e
33%
Water types, 2013e
34%
33%
33%
34%
Hot-cold
Purified
Cold-ambient
Spring
Others
Others
33%
Machine types Commentary Water types
Commentary
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Market structure Bottled coolers Legislation ď ˇ Commentary Maintenance and additional services ď ˇ Commentary
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Point Of Use market
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Market structure Point of use Point of use units 2008-13e 1,200
1,000
1,000
1,000
1,000
1,000
1,000
1,000 800 600
BWC to POU conversions
400
Units added
200
2012
New POU 2013e
2012
2013e
Replacement rate % 0 2008
2009
2010
2011
2012
2013e
Number of units
ď ˇ Commentary
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Market structure Point of use ď ˇ Commentary
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Market structure Point of use Outlets, 2013e
Commercial
50%
50%
Domestic
Outlets ď ˇ Commentary
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Market structure Point of use Rented/Sold split, 2013e
Machine types, 2013e
33%
34% Hot-cold Rented
Cold-ambient Hot-cold-ambient
50%
50%
Sold
33%
Machine types Commentary Rented/sold Commentary
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Market structure Point of use Maintenance and additional services ď ˇ Commentary
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Bottled cooler and Point of Use market
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Price structure and revenue indicators Bottled coolers and point of use Bottled water coolers
2013e
Point of use
Average monthly rental ($)
Average monthly rental ($)
Average bottle price ($)
Average sales price per unit ($)
Total revenue ($)
Total revenue
2013e
ď ˇ Commentary
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Price structure and revenue indicators Bottled coolers and point of use ď ˇ Commentary
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Bottled coolers Companies Machines in December
2009
2010
2011
2012
2013e
2009
2010
2011
2012
2013e
% share 2013
% 12-13
Company 1 Company 2 Company 3 Others Total market
Million litres
% share 2013
% 12-13
Company 1 Company 2 Company 3 Others Total market
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Bottled coolers Brands Million litres
2009
2010
2011
2012
2013e
% share 2013
% 12-13
Brand 1 Brand 2 Brand 3 Brand 4 Brand 5 Brand 6 Brand 7 Others Total market
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Point of use Distributors Machines in December
2009
2010
2011
2012
2013e
% share 2013
% 12-13
Company 1 Company 2 Company 3 Company 4 Company 5 Others Total market
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Bottled coolers and point of use Forecasts 2014f
2015f
2016f
2017f
2018f
% av 13-18
% 13-18
Bottled water coolers Units % change Million litres % change Point of Use Units % change Total coolers Units % change
ď ˇ Commentary
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Bottled coolers and point of use Forecasts ď ˇ Commentary
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Bottled coolers and point of use Forecasts
BWC/POU split, 2008
BWC/POU split, 2013e
BWC 50.0%
50.0%
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BWC 50.0%
POU
BWC/POU split, 2018
50.0%
BWC 50.0%
POU
50.0%
POU
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Appendix
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Bottled coolers and point of use Appendix Definitions Manufacturer: Company that manufactures and/or assembles POU units for sale to suppliers and/or distributors. Supplier: Company that purchases POU units from manufacturers before reselling them to distributors and/or end-users. Distributor: Company that sells or rents POU units direct to end-users. Symbols e f BLWA BPA EPA HOD IBWA NRDC NSF OCS PET POU RO ROI UV WQA
Estimate Forecast Bottleless Water Association Bisphenol A Environmental Protection Agency Home and Office Delivery International Bottled Water Association Natural Resources Defense Council National Sanitisation Foundation Office coffee service Polyethylene terephthalate Point of use Reverse osmosis Return on investment Ultra violet Water Quality Association
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Bottled coolers and point of use Appendix US State abbreviations Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas
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AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS
Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina
KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC
North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY
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Company profiles
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